Channel 4 confirmed today that it will axe Big Brother after a decade following next summer's 11th series.

The broadcaster announced this morning at its autumn programming launch that it would not renew Big Brother producer Endemol's deal for the reality show.

Another series of Celebrity Big Brother will be broadcast in January before Channel 4's association with the show comes to an end.

Channel 4 is locked into a £180m three-year deal with Endemol which means an 11th and final series will air next year before the curtain is drawn on the show, which made household names of housemates such as Jade Goody.

The broadcaster said today that it would use the axing of Big Brother for the "most fundamental creative overhaul" in its 27-year history, with measures including an extra £20m a year investment in more "event drama", such as the critically lauded Red Riding and The Devil's Whore.

Channel 4 will also be looking for more "quirky, returnable series aimed at younger audiences" for its main network and E4, in the mould of Shameless and Skins, with the axing of Big Brother freeing up 200 hours of airtime from 2011.

"Big Brother has been our most influential and popular programme over the last decade. Big Brother will leave a huge hole and filling it will involve the most fundamental creative overhaul in our history. We have 18 months to transform the schedule," said Julian Bellamy, head of Channel 4.

"It has been hugely innovative in its own right, has provoked a really astonishing level of public debate and has been an underappreciated showcase for social diversity and youth culture. Its success has also helped support an extraordinary range of creativity across Channel 4. Inevitably we're both excited and ever-so-slightly terrified by the prospect of getting by without it," Bellamy added.

Kevin Lygo, Channel 4 director of television and content, said the broadcaster was still making a profit from Big Brother despite its ratings decline in recent years and could have looked to renew a deal with producer Endemol beyond 2010.

Lygo said axing Big Brother would not solve Channel 4's funding problems, with the broadcaster having £125m less to spend on programming this year compared with 2007, but would give Channel 4 more flexibility in how the programming budget was spent, assuming the advertising recession relents.

Channel 4 is understood to have struggled, however, to make as much money from the show since striking the £180m renewal deal with Endemol in 2006. Channel 4 had its hand forced to some extent in negotiations by the threat of ITV stepping in to snatch the show.

Big Brother also became a victim of its own success as far and away Channel 4's most commercially successful show, with critics using it to argue that the broadcaster was straying from its public service remit.

Audiences and advertising revenues have dropped off in recent years, particularly since the Shilpa Shetty race row that engulfed Celebrity Big Brother and Channel 4 in early 2007.

This summer's 10th series has been averaging around 2 million viewers, down a third year-on-year.

Big Brother is unlikely to disappear from UK TV screens, however, with another broadcaster expected to step in to pick up the rights from Endemol.

Big Brother was axed in Australia last year but has enjoyed something of a ratings renaissance in the US this summer, a market in which the format has not traditionally done well.

Viewing figures up until the end of July show that Big Brother 10 averaged 2 million viewers and a 10.1% audience share on the main Channel 4 network. This is down 33% year-on-year, for the show's first 53 days on air, between 4 June and last Sunday, 26 July.

The average viewing figures for the key advertiser-friendly 16- to 34-year-old demographics for the series so far stand at 700,000 viewers and a 16.7% share.

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